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Apple cuts prices for students, teachers

As part of its efforts to stem a market share decline, the company is offering college students and teachers larger discounts on new Macs--up to 15 percent more off some models.

Ina Fried Former Staff writer, CNET News
During her years at CNET News, Ina Fried changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley.
Ina Fried
3 min read
As part of its efforts to stem a market share decline, Apple Computer is offering college students and teachers larger discounts on new Macs--up to 15 percent more off some models.

Over the weekend, Apple lowered the price it charges educators and higher education students to the same price it charges schools and colleges, a drop of up to 15 percent on some models.

"This pricing action supports Apple's efforts to grow market share among individual purchasers, especially (college) students," an Apple executive wrote in a memo to Apple's campus resellers. Apple has long offered discounts to college students and teachers, but in the past, such discounts have been less than those offered to schools.

The move offers a particularly good deal on Apple's notebooks, because it can be combined with promotions that give education buyers a $200 rebate when purchasing a PowerBook or iBook with an iPod as well as a rebate that gives another $100 off with a Hewlett-Packard printer.

Despite a yearlong "switch" campaign designed to woo Windows users over to the Mac, Apple has seen its share of the worldwide computer market fall to 2.3 percent, down from 2.7 percent a year ago, according to market researcher IDC.

Apple did manage to boost its overall revenue to its highest level in nearly three years in the quarter ended June 30, offsetting lower unit shipments with higher iPod sales as well as increased sales of notebooks, which are generally pricier than desktop machines.

Education sales have been one of Apple's main strongholds since the Apple II, although the company has lost ground to Windows-based PCs, ceding the top sales spot to rival Dell a couple of years ago.

Apple's market "share has continued to decline," said Jeanne Hayes, president of market research firm Quality Education Data (QED). A spring survey by QED found that Macs made up about a third of all computers in elementary schools, 29 percent of middle school computers, and 15 percent of the machines in high school classrooms. As recently as five years ago, Macs made up half of all computers installed at schools, Hayes said.

However, after several quarters of weak education sales, Apple Chief Financial Officer Fred Anderson said during the company's earnings conference call last week that Apple's education unit sales increased 5 percent from last year.

"While IDC has not released its results for the June quarter yet, its most recent published forecast projects a 19 percent market decline for the quarter, suggesting a healthy market share increase for Apple relative to the year-ago quarter," Anderson said.

By extending lower prices to teachers, Apple is continuing its strategy of trying to ensure that educators are aware of its latest technology. The company earlier had offered free copies of Mac OS X to teachers.

"We have simplified our education pricing to make it easier for more education customers to experience the innovative digital lifestyle of a Mac at home," an Apple representative said in a statement provided to CNET News.com. "Higher education faculty, staff and students as well as K-12 educators can now purchase many Apple products for personal use at published institutional prices."

Appealing to individual educators makes sense, Hayes said. "There is a lot of residual loyalty out there," she said. The problem for Apple is that schools are under increasing budget pressure. In addition to Macs being more expensive than Windows-based PCs, many schools are trying to lower the cost of managing their computers, she added.

"It's harder for them to have two platforms," Hayes said.